Research reveals the extent of hidden tenants in the UK

Some 49% of residential letting agencies in the UK have found people living unofficially in rented accommodation during checks on the property.

That amounts to 3.3 million people and 75% of these resident ‘ghosts’ have been living in other people’s rented homes unofficially for more than six months, according to research commissioned by Direct Line for Business.

The insurer is warning that landlords risk invalidating buildings and landlord insurance if a property has multiple occupants not listed in the tenancy agreement.

Lettings agents who have discovered people living in rented properties that were not listed on the tenancy agreement, have found on average almost one in 10, or 8%, of the properties on their books were affected.

In one property in Reading multiple families were found to be living in a two bedroom house, when just one person was listed on the tenancy agreement. Not only could this be in contravention of housing regulations, but with so many people living in a confined space the risk of wear and tear on the property and risk of damage is magnified significantly. This could potentially pose a serious financial burden for repairs on landlords.

Landlords’ insurance policies and potentially their buildings cover could be invalidated if multiple occupants are living in a property but are not listed on the tenancy agreement. The business pointed out that it is important that landlords regularly check that the people listed as the occupants on their rental agreement are actually the tenants of the property and that the tenants have not sublet or allowed others to also live in the property full time.

‘Lettings agents have seen significant damage caused to properties where people were crammed into a home while not listed on the lease. In one property we heard of, shelving had been removed from a cupboard under the stairs to create a makeshift bedroom,’ said Jane Guaschi, business manager at Direct Line for Business.

‘Landlords can reduce the financial risks associated with renting out properties by taking out insurance to cover against risks such as accidental damage. However, this cover could be invalidated if there are occupants who are not listed on the tenancy agreement,’ she explained.

The research also highlighted the vast majority of landlords do not change the locks on properties between tenancies, even if not all the keys have been returned. Of the letting agencies surveyed the vast majority, 71%, said that over nine out of 10% of the landlords on their books did not change the locks between tenancies. With many tenants cutting multiple sets of keys to give to partners or family this poses a significant security risk.